Bovis rejects takeover bids from Redrow and Galliford

Bovis has entertained proposals from rivals Redrow and Galliford, but rejected them both.

Bovis has confirmed that it received written proposals from Redrow and Galliford Try, outlining potential merger proposals. Redrow proposed a share and cash transaction for the company. Galliford Try proposed an all-share transaction for the Company.

The Board of Bovis rejected both proposals after concluding that neither reflected the underlying value of the Bovis business.

“The Board also concluded that the Redrow proposal was not in the interests of Bovis shareholders as the cash element of the offer would require shareholders to crystallise value at the current Bovis valuation,” a bourse filing said, adding that discussions with Galliford are ongoing.

Redrow’s proposal consisted of £1.25 per Bovis share in cash and 1.32 new Redrow shares in exchange for each Bovis share, representing a value of £6.59 per Bovis share based on the Redrow share price of £4.99 as at 10 March 2017.

“Redrow continues to believe the potential combination offers a compelling opportunity to create a combined business with the scale and operational strength to compete more effectively in the growing UK housebuilding market,” said the housebuilder in a statement, adding that there was no certainty that any offer would ultimately be made for Bovis.

Galliford Try proposed that the equity in the combined group would be split 52.25% to Galliford Try shareholders and 47.75% to Bovis shareholders. On the basis of the share price of Galliford Try at close of business on 10 March 2017 this would value the entire issued equity of Bovis at £1,191m or 886p per share, representing a 7.0% premium to the closing share price of Bovis on the same date.

A potential merger with Galliford is still on the table, and the housebuilder is expected to make an announcement on any progress over the next few weeks.